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Student loans can create a big strain on the budget. It’s very common to have trouble making student loan payments. Don’t just ignore the situation, however. Defaulting on student loans can destroy your credit for a very long time. Instead, analyze the situation and adopt some survival strategies.

Before you begin, you must know your loans. Do you have federal student loans or do you have private student loans? Federal student loans offer many more options for dealing with payment issues, but there will still be some options for dealing with your private loans too. Private loans may offer loan modification programs that can help you, and some private student loans may even have some forbearance options. Private loans can be the most devastating loans to deal with, however, so if you haven’t taken any loans yet, try to avoid private loans if you can.

You can usually save time and money by consolidating your loans before you start trying to use any of the strategies for dealing with payment problems. This reduces the number of phone calls you’ll need to make and the number of forms you’ll have to fill out. It also means you’ll only have to negotiate with one lender.

Here are some strategies you can use if you are having trouble making payments on your federal student loans. Using these strategies is as simple as calling your loan provider and asking for the appropriate forms. These strategies are all very healthy for your credit report as the banks will continue to report “Paid or Paying as Agreed” every month so long as you meet the terms of each of these programs.

Ask for a deferment

When you defer a loan, you don’t have to pay, and interest does not accrue. A deferment can buy you up to 9 months. Some loans can be deferred multiple times. You do have to meet certain conditions for a deferment. There are deferments for temporary disability, for enrollment in rehabilitation programs for the disabled, for enrollment as a full-time student, for temporary unemployment, and for economic hardship. There are limits on how many times you can defer your student loans, but deferments are ideal for getting you through temporary situations.

Try forbearance

If you don’t qualify for a deferment you may qualify for forbearance. Interest accrues during forbearance, but you don’t have to make payments. Furthermore, the typical length of forbearance will buy you a year of time. Forbearances are easier to obtain than deferments are. You can typically obtain forbearance if you have health problems, if you have unforeseen personal problems, if your monthly payments amount to more than 20% of your monthly income, or if you have an inability to pay off the loans during your loan term.

Try a graduated repayment plan

Graduated repayment plans can help if you simply need lower payments. Graduated payments start low, but increase over time. There will be no surprises as you will be provided with a schedule ahead of time. It’s a good idea to use the time to either gain more income, or to attempt to remove some expenses. Paying off another bill to free up some money, for example, might be a good strategy to adopt. Always take a long term view that is aware that those payments will go up in the future.

Extended repayment plans are similar, but these payment plans increase your loan term. They are typically only available to people who have $30,000 in student loans, or more.

Try an income-based repayment plan

Income based repayment plans set a payment based on your income. This payment will change each year as your income changes. If you live below the poverty line your payment will be set to “zero.” Most other people will typically see payments of no more than 10% of their monthly income, though the percentage gets higher as your income rises. The total percentage is capped at 15% of your monthly income. It’s very important to fill out the appropriate paperwork year after year. If you stay on the plan for 25 years your loan will be cancelled, but the forgiven amount will be taxed as income. You’ll need to consult a tax professional to minimize the impact of this “income” when the time comes.

Take a public service job

Certain forms of military and law enforcement services make you eligible for loan cancellation. You can also get your loans cancelled if you provide certain services to needy populations, including some teaching and health care jobs. Public service can also apply: the Peace Corps, for example, is one eligible program. If you can get your loans cancelled you certainly will never have to worry about grappling with the payments ever again.

Don’t let a fear of student loans keep you from getting the education you need. While it is true that student loans cannot be discharged in a bankruptcy there are still many other ways to keep your payments from becoming a hardship.

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